22 September 2015

Hinkley

Today’s announcement of a £2 billion government guarantee for Hinkley C confirms that Chancellor George Osborne and his Treasury cannot be trusted to run the UK’s energy policy – which is precisely what they are doing. On top of decimating the renewables industry, now they’re risking billions on a failed nuclear design owned by failing companies. It’s time to stop the madness. If one thing is clear in the incoherent mess that is UK energy policy today – which is set to to saddle UK taxpayers and energy users with a disastrous combination of high prices, massively subsidised nuclear power, rising carbon emissions as fossil fuels are forced to plug the gaps in both nuclear and renewable power delivery, and a growing likelihood of blackouts – it is this: George Osborne and his Treasury department must get their hands off DECC. Amber Rudd – a former Parliamentary Private Secretary to Osborne – must give way to a new and independent secretary of state, free to put in place rational, coherent and consistent policies on energy and climate change.

There is, it seems, no limit to the lengths to which George Osborne, the UK chancellor, is prepared to go to please China. The most recent example is the latest chapter in the saga of the proposed Hinkley Point nuclear power plant in south-west England. Mr Osborne, on a visit to Beijing, has offered the Chinese £2bn of government guarantees in return for their investment in the much delayed project. The terms of the agreement have not been published but under normal definitions that means that the Chinese investment capital will be fully protected. The deal is not yet completed and there is a sense of desperation in Whitehall: the government wants to have it signed before President Xi Jinping’s visit to the UK next month. But before we rush to sign, there should be public disclosure of the full offer to the Chinese on Hinkley Point, and what other deals have been made at the same time. We are told, for example, that the Chinese will also build, own and operate another new nuclear station at Bradwell in Essex, south-east England. Will they, for example, be required to meet all existing UK nuclear safety and labour standards or will the new stations be largely built in China using local labour and assembled in the UK? Another pressing issue that should be clarified is whether the chancellor has seen and read internal reports from EDF and Areva, the two state-owned French nuclear firms, on what has gone wrong with the construction of the two “EPR” European pressurised reactors (the reactor design that will be used at Hinkley) in France and Finland. Both projects are billions over budget and years behind schedule. Once he has read the reports, he should make sure they are published. If they are not to be made public, we should be told why not. The mystery in all this, given Mr Osborne’s apparent confidence in nuclear technology, is why he is asking for Chinese money at all. EDF, it seems, will not itself invest more than half the necessary money in its own project at Hinkley Point, despite the high price and extensive guarantees it has been offered. All the parties seem to want someone else to take the risk. If Mr Osborne is really happy with the plans for the power plant, why does he not invest directly using the UK’s government’s ability to borrow long-term money at very low rates? This would reduce the costs and bring down the bills facing British consumers over the next 35 years. It is, however, also possible that his confidence about the Hinkley project is just a performance.

The UK government is pushing ahead with the £24.5bn plant, despite widespread condemnation of what critics say will be an expensive mistake. “You can always judge a man by the quality of his enemies,” said Oscar Wilde. In the case of the UK government’s bid to build a new nuclear power station at Hinkley Point, the quality of its enemies suggests the plan is idiotic. It’s true that the UK needs secure, low-carbon energy and that renewables are intermittent. The problem is that, apart from those with political or real capital riding on the deal, virtually no-one thinks the Hinkley plant is the answer. Let’s start with well-known energy analyst Peter Atherton, who is no tree-hugger. He said the deal is “one of the worst ever signed by a British government”, who are buying the “most expensive conventional power station in the world”. When serious people queue up to condemn Hinkley as a colossal waste of time and money, risking security, affordability and the climate, ministers should swallow their pride and ditch it.

The UK will provide £2 billion of initial support for a new nuclear power station at Hinkley Point in southwest England, Chancellor George Osborne has announced on a trade visit to China, which is backing the project. The price guarantee will pave the way for French utility EDF, and its financial partners China General Nuclear Corp and China National Nuclear Corp, to give the go-ahead to the £16 billion scheme later this year, the government said.

This morning’s announcements sparked a flurry of criticism from opponents of the Hinkley Point project who argue the UK is offering excessive subsidies and guarantees to Chinese and French state-owned companies in an attempt to get the controversial development built. In a sign of the mounting political opposition to the project, newly appointed Labour Shadow Energy and Climate Change Secretary Lisa Nandy signalled the government could no longer count on the opposition’s backing for the project. “Hinkley Point C is on course to become the most expensive power station ever built,” she wrote in a series of posts on Twitter. “This project could leave Britain’s bill payers paying over the odds for decades because ministers have negotiated such a bad deal. There is a role for new nuclear power stations to provide us with low-carbon power supplies but not at any cost. V troubling that govt has agreed these extra nuclear subsidies at the same time it’s cut support for more affordable clean energy tech.”

Amber Rudd, Britain’s energy secretary, on Monday dismissed calls for a rethink, as critics pointed out that the planned Hinkley Point nuclear plant in Somerset will cost nearly 14 times as much as equivalent gas-fired generating capacity. Peter Atherton, utilities analyst at Jefferies, estimates that the new nuclear power station planned by French energy group EDF and its Chinese partners will cost the UK as much as Crossrail, the London 2012 Olympics and the revamped Terminal 2 at Heathrow combined. Lisa Nandy, Labour’s shadow energy secretary, says Hinkley is “on course to become the most expensive power station ever built” and could leave households and businesses “paying over the odds for decades”. Ms Rudd, while acknowledging Hinkley would not be “very cheap”, insisted that it offered “value for money”. She also made it clear, in a BBC interview, that her support was not determined by economics alone but also by the government’s targets for low carbon energy and a need for reliable power.

Britain needs to take a more cautious approach in striking strategically sensitive business deals with Beijing. Britain and China, if government pronouncements are to be taken seriously, are approaching a new dawn. George Osborne, currently in Beijing, has proudly declared that no economy in the West is as open to Chinese investment as that of the United Kingdom. Certainly the Chinese stake in Britain is more than in France and Germany combined. The British government shrewdly sees tactical advantage in demonstrating commercial confidence in China at a time when its economic machine is slowing down. Experts warn that China would gain access to the architecture of the British national grid, as well as its nuclear technology. “Add in the military and security issues of letting Chinese state-owned companies into the heart of the British nuclear industry,” says Dieter Helm, professor of energy policy at Oxford University, “and it seems positively perverse to prefer Chinese government money to British government money in so sensitive a national project.” It will be part of the security risk for decades to come. In the United States, Canada and Australia, foreign companies are banned from owning critical infrastructure. In Britain the approach is rather to shuffle responsibility from department to department and ultimately to allow deals to go forward by default. China now has investments in sectors that could prove vital in terms of conflict – Thames Water, Felixstowe port and the Grangemouth oil refinery. In 2013 parliament’s intelligence and security committee undertook a study into the co-operation between British Telecom and the telecommunications company Huawei. It found that Britain had done the deal without duly weighing the secu- rity considerations. Given the range of offensive Chinese hacking, the arrangement should have been deemed high risk. The report concluded that all nationally sensitive infrastructure should be subject to much closer oversight – not just due diligence at the outset, but scrutiny throughout the lifetime of a project. Government had to set up a system of alerts to help to filter potential foreign investment in vulnerable areas. Good advice which should be followed now. The overhaul of the civil nuclear programme demands exceptional caution. Safety concerns about the quality of Chinese technology can be dealt with through rigorous control in Britain. Since it is careful to shield its own sensitive sectors from foreign involvement, it will understand the need for British scrutiny. We must avoid sleepwalking into commercial dependency on Chinese companies that are quasi-state owned. The national grid is essential for the survival of the nation. It does not have to be put up for sale to the highest bidder.

George Osborne will today pledge a ‘golden decade’ of co-operation with China after brushing off fears over its involvement in British nuclear power. He yesterday signed off a £2billion ‘subsidy’ for a new atomic plant in Somerset – to be part-funded by Beijing – despite the security fears of critics.

CHANCELLOR George Osborne will plough a further £2 billion of taxpayers’ cash into Hinkley nuclear power station in Somerset. Environmentalists and anti-nuclear campaigners slammed the decision, but it was welcomed by unions representing workers in the dangerous industry.

Did the Chancellor have to go all the way to China hoping to secure funding for Hinkley C? There are plenty of insurance companies in the City of London with billions of pounds to invest. You may be asking why they aren’t queuing up to help finance Britain’s next generation of nuclear power stations. On the face of it the risk is small and the rewards enormous. It’s the strong view of some in the City, among them HSBC, that the economics of this project no longer stack up and yet today, politically, we probably passed the point of no return. Hinkley C will surely happen now. But EDF has yet to formally commit to this project. A final investment decision is expected early next month. It’s then we’ll learn just what promises the government has had to make tying it in for the very long term.

Bradwell

China is expected to be allowed to build a nuclear power station in Essex as George Osborne embraced the world’s most populous country as an ideal partner for British business. The chancellor, on a trade mission to the country, argued that Britain should “run towards China” to help boost the UK economy and signalled that China could build a nuclear site in Bradwell, Essex, as part of a wider nuclear co-operation worth tens of billions of pounds. Speaking at a press conference, Osborne sidestepped concerns over Downing Street’s growing proximity to Beijing. When asked about what US officials have called Britain’s “constant accommodation” of Beijing, Osborne added: “I think it is important that, as China grows, it rightly takes its place at the top table.”

British, French and Chinese cooperation that could mean new nuclear power stations are built in the East of England. The government’s on the verge of signing a deal that would give the green light to building new nuclear reactors at Bradwell in Essex and Sizewell in Suffolk. The Essex plant is expected to be built in the next decade.

Doubts are also growing in the UK that the country needs new nuclear power to meet its energy requirements. Overall demand is falling as efficiency improves, and greater connectivity with continental Europe gives the UK access to cheaper electricity. The UK government has guaranteed a so-called strike price for energy produced at Hinkley Point C — if it is ever completed — of nearly three times the current UK wholesale price. While it is not easy to predict future wholesale energy prices, there are good reasons to suppose that they will continue to fall in Europe as investment in renewables begins to yield dividends.

Nuclear Research

Chancellor George Osborne has this morning backed up his commitment to provide a £2bn loan guarantee to EDF’s planned Hinkley Point nuclear power plant with the announcement the UK and China are to jointly fund a new “cutting-edge nuclear research centre” in the UK. Osborne, who is in Beijing at the 7th UK-China Economic and Financial Dialogue summit, joined with Chinese Vice Premier Ma Kai to announce the two countries’ governments will co-fund a £50m new research hub. In addition, Cumbria and Sichuan Province announced a new partnership to work together on nuclear decommissioning and waste management projects. The latest announcements came hot-on-the-heels of news the UK government has confirmed a £2bn loan guarantee for the Hinkley Point project, in a move designed to secure a final investment decision from EDF and its Chinese partners China General Nuclear Corporation and China National Nuclear Corporation.

A landmark deal between Britain and China is fuelling hope of a new £50m nuclear development in west Cumbria. Speculation is growing that the region is set to house a cutting-edge atomic research laboratory. World-leading nuclear know-how from the county is also to be deployed in China as part of a potentially lucrative trade link.

Politics

Jeremy Corbyn’s shadow energy secretary has backed nuclear power, revealing a further split between the new Labour leader and his shadow cabinet. While criticising the government’s management of the new construction project at Hinkley Point in Somerset, Lisa Nandy said yesterday that “there is a role” for nuclear plants in Britain. Mr Corbyn indicated during his campaign for the leadership that he was against the construction of any new nuclear power plants, expressing concerns over safety and waste disposal. “I think we’ve been misled about the true costs of nuclear power generation,” he told the Greenpeace pressure group. “The safety issue of any nuclear power stations – what’s happened in Japan – is obvious for all to see [. . .] and the issue nobody has an answer to is the question of nuclear waste.” The split emerged after the chancellor annou nced a £2 billion funding package in which China would invest in Hinkley Point. “We want the UK to be China’s best partner in the West,” George Osborne said on a visit to China. Lisa Nandy said: “There is a role for new nuclear power stations to provide us with low-carbon power supplies but not at any cost. It is especially troubling that the government is agreeing these extra nuclear subsidies at the very time it is cutting support for more affordable clean energy technologies.”

Energy Markets

Energy companies will be forced to wait a further six months for the findings of the Competition and Markets Authority (CMA) probe after the regulator said it needs to refine its analysis of the energy market.

CHP

Almost £300m is being invested in two new combined heat and power (CHP) plants in Northumberland and Durham. The Green Investment Bank (GIB) and property developer John Laing Group have committed £48m to a new £138m CHP plant in Cramlington; while a separate investment, also announced today, will see £160m put towards a waste-wood-fired power station in Stockton-on-Tees.

Renewables

The government’s wholesale cuts to renewable energy subsidies are sending a worrying sign to investors, says employers’ group, the CBI. The head of the group, John Cridland, said firms must be given confidence that ministers really mean to tackle climate change. The government cut subsidies in the summer because the £7.6bn budget had been exceeded. Ministers say they are committed to protecting the climate. They said they would announce replacement renewables policies soon. Critics say new policies can’t come quickly enough. Mr Cridland said: “The green economy is an emerging market in its own right, brimming with opportunity. “Yet, with the roll-back of renewables policies and the mixed messages on energy efficiency, the government risks sending a worrying signal to businesses. “We need all countries to pull in the same dir ection at the Paris Climate Summit (in November) to give firms the certainty and confidence they need to invest in the green economy for the long run”.

Renewables’ share of the global electricity supply could more than triple in the next 15 years – from 21% today to 64% – according to a new Greenpeace report. The report is the latest edition of Greenpeace’s Energy Revolution series, which originated back in 2005, and has previously predicted the rapid take-up and cost reduction of renewables. The 2015 version projects a continued renewables boom to 2030 and beyond, with the planet reaching 100% electricity from renewables by 2050. The report claims that the sector has already proved it can expand rapidly and the only thing preventing it from reaching this target is political will, which could all change at the Paris conference in December.

The Energy Revolution 2015 Report envisions global emissions peaking at the end of this decade, a return to 1990 levels in 2030, a 60% reduction by 2040 and near zero emissions in 2050 (discounting non-energy sectors such as steel). According to lead author Sven Teske, not only is it possible to completely decarbonise the global power sector by 2050, it can be done at no extra expense — because of all the fuel cost savings. Heating is more complicated, but still feasible since there’s a huge number of potential efficiencies. Considerable capital would have to be devoted to developing renewable heating technologies such as enhanced geothermal and solar arrays. Decarbonising transport is tricky as well, but can largely be achieved by growing and electrifying public transports like trains, as well as encouraging the uptake of ever-improving electric vehicles.

A new report from Greenpeace says the world can be 100 percent renewable by 2050, and 85 percent renewable in just 15 years. The 2015 Energy [R]evolution report, the latest in a series that has offered the most accurate projections of any major analysis, worldwide, says that for the first time, the path to 100 percent renewable is cost-neutral. In addition, no new technological advancements are needed, the report says. “It’s basically political will,” Emily Rochon, a global energy strategist at Greenpeace, told ThinkProgress. “The primary premise of the Energy [R]evolution scenario is we have all of the solutions already on the table to get there.”

This is the year when the fight against climate change could take a dramatic turn. The conference in Paris in December presents political and business leaders with the opportunity to take the critical decisions needed if we are to keep average temperature rises to no more than 1.5 or 2 degrees Celsius. According to the IPCC, humankind cannot emit more than 1,000 giga-tonnes of CO2 from now, if we are to stay within this limit. At the current and projected rate of consumption, this entire carbon budget will be used by 2040.

The government claims that we need nuclear ‘baseload’ power to keep the lights on, writes Damian Kahya. But a new study shows reliable, low carbon energy can be provided by combining diverse green technologies including efficiency, large scale renewables, ‘smart grid’, energy storage and rarely used fossil fuel backup.

What was once seen as “fanciful or unrealistic” is now very much in vogue. The vision for a fully decarbonised, and perhaps even 100 per cent renewable powered global economy, has in the past year moved from being an environmentalist pipe dream to official policy in a growing number of countries. The G7 nations earlier this year backed calls for the full “decarbonisation of the global economy over the course of this century”, providing a major boost to efforts to get a clause requiring the development of a net zero emission economy post 2050 into the planned Paris climate change agreement. Only last week, Sweden joined a growing band of countries pledging to become fossil fuel-free, and the week before the South Australian government set a goal for Adelaide to become the first carbon neutral city in the world. All of which makes the publication today of the fifth edition of Greenpeace’s bi-annual Energy (R)evolution report, detailing how to deliver a global energy system that is 100 per cent renewable by 2050, particularly timely. The report, which is developed in partnership with the Global Wind Energy Council and SolarPower Europe, shows how it remains technically and economically feasible to power the global economy using renewable energy. But only if a series of green policy measures are embraced and clean technologies continue their rapid improvement. It would be all too easy to reject Greenpeace’s conclusions with a ‘they would say that, wouldn’t they’ shrug, but for two important considerations. First, the scenario set out by the campaign group is no longer a million miles from the scenario being pursued by many of the world’s largest economies, namely the full decarbonisation of the energy industry by 2050. Greenpeace’s on-going opposition to nuclear power and scepticism about the role of carbon capture and storage may be rejected by some governments, but the attempt to predict how clean technologies could one day decarbonise the global economy is highly relevant to policies currently being pursued from Washington to Beijing.

Renewables – solar

GreenWood Forest Park in North Wales is set to save over £1m on its energy bills thanks to a newly installed ground-mounted solar array system. The theme park has invested £150,000 on a 576-panel 150kW system which will reduce the its carbon expenditure by 1,700 tonnes over a 25-year period, powering 80% of the park on a daily basis.

Fossil Fuels

The pension funds of half a million public sector workers in Scotland are investing a massive £1.7 billion into fossil fuel corporations, exposing them to financial risk if the so-called ‘carbon bubble’ bursts because of climate pollution. An investigation by environmental groups has revealed the huge and increasing sums of money local government pension schemes are pouring into coal, oil and gas companies – despite the dangers they pose to the planet.

Economists claim converting underground coal into gas could generate £13bn pounds for the UK, with almost half of it being retained in Scotland. The conclusions came in a report compiled for a firm seeking to extract gas from the Firth of Forth. Cluff Natural Resources wants to build the UK’s first offshore underground coal gasification (UCG) plant in Fife. WWF Scotland said fossil fuel schemes were distracting from efforts to develop clean renewable energy. Economic consultancy Biggar Economics put together the report for Cluff outlining the predicted benefits of pioneering UCG in Scotland. It suggested the move could create up to 11,900 direct and indirect jobs as well as supporting thousands more in the chemicals industry – with nearly 5,000 of these jobs in Scotland and more than 1,000 in the Firth of Forth area.

Plans to convert underground coal to gas in the Firth of Forth are “not in the best interests of the Scottish people”, according to an MSP. Alison Johnstone, who represents Lothian for the Scottish Greens, warned that a proposal to build the UK’s first offshore underground coal gasification (UCG) project near Kincardine in Fife was “short-sighted and damaging”. Ms Johnstone urged the Scottish Government to instead focus on investment in renewable energy sources and a sustainable economy. Her comments came as energy firm Cluff Natural Resources (CNR) published a report claiming that UGC could generate billions of pounds for the UK economy.

Algy Cluff: The United Kingdom’s tough carbon tax regime will result in our remaining onshore coal mines closing within three or four years, due to lack of demand from our rapidly diminishing fleet of coal-fired power stations. There is a small section of our community that will rejoice in this fact but the majority will quite rightly wonder what removing more than 40 per cent of the UK’s electricity generating capacity does to its ability to ensure a reliable supply for homes and business. And it’s even worse in Scotland. When Longannet closes in March 2016 it will take with it the capacity to generate more than three quarters of the electricity required by Scotland, regardless of weather.

Rich western countries and the world’s leading developing nations are spending up to $200bn (£130bn) a year subsidising fossil fuels, according to a report from the Organisation for Economic Cooperation and Development. The Paris-based thinktank said its 34 members plus six of the biggest emerging economies – China, India, Brazil, Indonesia, Russia and South Africa – were spending money supporting the consumption and production of coal, oil and gas that should be used to tackle climate change. “The time is ripe for countries to demonstrate they are serious about combating climate change, and reforming harmful fossil fuel support is a good place to start,” said the OECD secretary general.

Gov thinking seems to have finally caught up with reality - main question is not how best to make the taxpayer cough up for new nuclear. No justification for spending our money on outdated technology when renewables cheaper, quicker to build and cleaner.
https://t.co/PpeTfaBNpA

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